Nevada Regulators Warn FanDuel to ‘Stay in Its Lane’ on Prediction Markets
Nevada gaming regulators have issued a stern warning to FanDuel and its parent company, Flutter Entertainment, cautioning the company to steer clear of sports-related prediction markets. The admonition came during a regulatory hearing and was prompted by FanDuel’s recent announcement of a partnership with CME Group, the world’s largest derivatives exchange.
A “Very Sensitive Spot” for Nevada
The issue of prediction markets is a contentious one for Nevada. The state is currently involved in a lawsuit against the prediction market platform Kalshi and the trading app Robinhood. Nevada argues that these platforms, which offer contracts on the outcomes of events, are essentially offering illegal sports betting. Kalshi and Robinhood, in turn, contend that their operations fall under the purview of the federal Commodity Futures Trading Commission (CFTC) and are therefore exempt from state gaming laws.
It is this legal backdrop that framed the regulators’ concerns. Nevada Gaming Control Board (NGCB) Commissioner Brian Krolicki told FanDuel representatives that the events market is a “very sensitive spot for us and in conflict with this state and our Gaming Control Act.”
He warned that by partnering with a CFTC-regulated entity like CME Group, FanDuel is “moving in the direction of CFTC oversight,” a move that could put the company at odds with its state-level licensors. “Any wrong move could endanger FanDuel’s Nevada license,” Krolicki stressed.
FanDuel’s Position and Reassurances
FanDuel’s partnership with CME Group is aimed at creating a new platform for trading event-based contracts. While the initial focus is expected to be on traditional commodities like gold, both companies have openly discussed the potential to offer sports-related contracts in the future.
Erica Okerberg, an attorney representing Flutter, attempted to allay the board’s concerns. She assured regulators that the company has not finalized any plans to offer sports contracts and that any such launch would require input from the NGCB.
“Flutter would not start any projects that could put its Nevada licenses at risk,” Okerberg stated, emphasizing that the company’s primary goal is to protect its relationship with state regulators.
A Tense but “Collegial” Exchange
Despite the underlying tension, the hearing was described as professional. NGCB Chair Jennifer Togliatti acknowledged that FanDuel had “done the right thing by fronting up” to discuss its plans openly with the board.
“Sometimes, regulators and licensees can’t agree and folks have to do what they have to do, but it is a respectful, collegial thing for you to do to come before us and say, ‘Hey, we’re looking at this, let’s talk about it’,” she said.
The exchange serves as a clear signal from one of the nation’s most influential gaming regulators. As the lines between financial trading and sports betting continue to blur, Nevada has drawn a clear line in the sand, and it expects its licensees to respect it.
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